Australian employers warned to take flexible work requests seriously by FWC

The FWC’s ruling considered an employer’s refusal to grant an employee a flexible working arrangement request. Although the ruling has been subject to significant media coverage, the decision itself is uncontroversial and simply maintains the FWC’s expectation that employers comply with requirements under the Fair Work Act when responding to flexible work requests.

In this case, the employer’s failure to engage meaningfully with the employee’s circumstances and to provide timely, evidence-based reasons for refusal was found to be inconsistent with the legislative framework. On 17 January 2025, a long-serving employee of a major Australian bank submitted a formal request for a flexible working arrangement, under section 65 of the Fair Work Act 2009 (Cth), seeking permission to work remotely to accommodate caregiving responsibilities (FlexRequest). Under the Fair Work Act, eligible employees are entitled to the right to request a change in working arrangements if certain circumstances apply, including pregnancy, carer responsibilities, disability, domestic violence or if the employee is 55 years or older.

The employee had requested that she be permitted to work remotely from her home in order to care for her two six-year-old children, including school pick up and drop off. When this request was refused by the bank and the employee offered a further alternative arrangement, where she would work from home two days per week and attend the local branch near her hometown instead of the closest corporate office in Sydney, the bank again declined the request. 

The bank’s refusal of the request was based on the employee’s requests being inconsistent with the terms of its enterprise agreement. 

Arbitrating flexible working arrangement disputes remains uncommon for the FWC. In the 2024–25 reporting period, the FWC received 289 applications under the relevant provisions, with only around 2% progressing to arbitration, as most disputes of this nature are resolved through conciliation or internal processes. This particular case offers valuable insight into the circumstances under which employers may be expected to accommodate employees’ flexible working arrangement requests.

Under the Fair Work Act, an employer may refuse a request only if the employer has both discussed the request with the employee and has genuinely tried to reach compromise about changes to the employee’s working arrangements. Any refusal must be based on ‘reasonable business grounds’. 

The act mandates the factors that an employer must consider in whether to refuse or grant a work from home request. Reasonable business grounds for refusing a request could include that:

• the new working arrangements requested would be too costly for the employer;
• there is no capacity to change the working arrangements of other employees to accommodate the new working arrangements requested;
• it would be impractical to change the working arrangements of other employees, or recruit new employees, to accommodate the new working arrangements requested;
• the new working arrangements requested would be likely to result in a significant loss in efficiency or productivity; and
• the new working arrangements requested would be likely to have a significant negative impact on customer service.

When assessing whether a refusal to grant a flexible working arrangement is reasonable, the FWC will consider the nature and scale of the employer’s operations. Larger and more financially robust organisations are generally expected to have greater capacity to adjust the working arrangements of other employees to accommodate such requests.

The bank, in its submissions, relied heavily upon the defence that granting the employee’s request would result in a significant loss in efficiency and productivity, and would have a negative impact upon the quality of customer service offered. Other evidence included the benefits in-person attendance provided in terms of fostering collaboration within the team and ensuring meaningful engagement with stakeholders across the business. When declining a flexible working arrangement request, many employers will rely on similar reasoning to what the bank did in this case. 

However, when considering the evidence of both parties, the FWC found that there was no question that the employee’s role could in fact be performed remotely, as she had already been doing so for several years. Her team had been exceeding performance expectations and there was no concrete evidence of any impact upon customer service was provided. The FWC also considered the employee’s evidence that other members of her team were already working remotely.

An additional factor under the Act includes the fairness between the parties if the request is granted. The FWC concluded that while it was accepted that the bank may gain some benefit from minimum levels of office attendance, the consequences of not making the order would be “seriously prejudicial for the applicant and her family”.

Finally, the FWC considered whether the order sought by the employee was inconsistent with the bank’s enterprise agreement. Under the act, the FWC must not make an order that would be inconsistent with any term of a Fair Work instrument.

The bank argued that the proposed flexible working arrangement conflicted with its hybrid working model under its enterprise agreement, which requires employees to attend a corporate office at least two days per week. However, the FWC found that a separate clause in the enterprise agreement expressly incorporated the right to request flexible working arrangements under the Act. Notably, any term in a modern award or enterprise agreement will have no effect if it contravenes, overrides or excludes entitlements such as the right to request flexible working arrangements.

Ultimately, the FWC held that the request was not refused on reasonable business grounds, and the employee’s request to work from home was granted. 

As arbitrated cases are uncommon, parties to these kinds of disputes often fail to realise that they have not complied with the applicable legislation. This case serves as a important reminder for employers to carefully follow both the procedural and substantive requirements under the Act when responding to FlexRequests. 

When refusing a request, employers must: 

• provide a written response to the request within 21 days;
• if refusing the FlexRequest, include details for the reasons of the refusal and the business grounds for refusal; and 
• provide any further compromises to the FlexRequest that could be accommodated.

Simply rejecting an application because it fails to adhere to company policy is not a refusal linked to reasonable business grounds. As such, not only is it vital that employers genuinely consider and explore workable business solutions, but also provide their employees with timely and detailed written responses. We recommend that employers:

• update flexible work policies to reflect legal obligations, especially around formal flexible work requests;
• review any internal hybrid work policies to ensure they don’t conflict with legal obligations;
• ensure all flexible work requests are responded to within 21 days, with documented reasons if refused;
• create training about flexible work request obligations and Train managers on how to handle requests lawfully, including how to consult genuinely and assess individual circumstances;
• prohibit blanket refusals, decisions must be specific, evidence-based, and tailored to the employee’s situation; and
• keep detailed records of all requests, consultations, and decisions.

This decision reinforces that flexible work is not a discretionary benefit or favour, but a protected entitlement and one that must be treated with fairness, transparency, and legal compliance. When employers get it wrong, the consequences go beyond employee dissatisfaction: they risk legal and reputational exposure.

Co-written by Nadine Walker of Pinsent Masons.